EC opens non-compliance investigations against Alphabet, Apple and Meta under Digital Markets Act

The European Commission (EC) said on March 25 that it has opened non-compliance investigations under the Digital Markets Act (DMA) into Alphabet’s rules on steering in Google Play and self-preferencing on Google Search, Apple’s rules on steering in the App Store and the choice screen for Safari and Meta’s “pay or consent model”.

“The Commission suspects that the measures put in place by these gatekeepers fall short of effective compliance of their obligations under the DMA,” the EC said.

In addition, the EC has launched investigatory steps relating to Apple’s new fee structure for alternative app stores and Amazon’s ranking practices on its marketplace.

The EC has ordered gatekeepers to retain certain documents to monitor the effective implementation and compliance with their obligations.

The EC has opened proceedings to assess whether the measures implemented by Alphabet and Apple in relation to their obligations pertaining to app stores are in breach of the DMA. Article 5(4) of the DMA requires gatekeepers to allow app developers to “steer” consumers to offers outside the gatekeepers’ app stores, free of charge.

The EC said that it is concerned that Alphabet’s and Apple’s measures may not be fully compliant as they impose various restrictions and limitations. These constrain, among other things, developers’ ability to freely communicate and promote offers and directly conclude contracts, including by imposing various charges.

The Commission has opened proceedings against Alphabet, to determine whether Alphabet’s display of Google search results may lead to self-preferencing in relation to Google’s vertical search services (e.g., Google Shopping; Google Flights; Google Hotels) over similar rival services.

The Commission said that it is concerned that Alphabet’s measures implemented to comply with the DMA may not ensure that third-party services featuring on Google’s search results page are treated in a fair and non-discriminatory manner in comparison with Alphabet’s own services, as required by Article 6(5) of the DMA.

The Commission has opened proceedings against Apple regarding their measures to comply with obligations to (i) enable end users to easily uninstall any software applications on iOS, (ii) easily change default settings on iOS and (iii) prompt users with choice screens which must effectively and easily allow them to select an alternative default service, such as a browser or search engine on their iPhones.

The Commission is concerned that Apple’s measures, including the design of the web browser choice screen, may be preventing users from truly exercising their choice of services within the Apple ecosystem, in contravention of Article 6(3) of the DMA, the EC said.

The Commission has opened proceedings against Meta to investigate whether the recently introduced “pay or consent” model for users in the EU complies with Article 5(2) of the DMA which requires gatekeepers to obtain consent from users when they intend to combine or cross-use their personal data across different core platform services.

The Commission is concerned that the binary choice imposed by Meta’s “pay or consent” model may not provide a real alternative in case users do not consent, thereby not achieving the objective of preventing the accumulation of personal data by gatekeepers, the EC said.

The Commission is also taking other investigatory steps to gather facts and information to clarify whether Amazon may be preferencing its own brand products on the Amazon Store in contravention of Article 6(5) of the DMA, and Apple’s new fee structure and other terms and conditions for alternative app stores and distribution of apps from the web (sideloading) may be defeating the purpose of its obligations under Article 6(4) of the DMA.

The EC has also adopted five retention orders addressed to Alphabet, Amazon, Apple, Meta, and Microsoft, asking them to retain documents which might be used to assess their compliance with the DMA obligations, so as to preserve available evidence and ensure effective enforcement.

The Commission has granted Meta an extension of six months to comply with the interoperability obligation (Article 7 DMA) for Facebook Messenger. The decision is based on a specific provision in Article 7(3)DMA and follows a reasoned request submitted by Meta. Facebook Messenger remains subject to all other DMA obligations.

The EC said that it intends to conclude the proceedings opened today within 12 months.

If warranted following the investigation, the EC  will inform the concerned gatekeepers of its preliminary findings and explain the measures it is considering taking or the gatekeeper should take in order to effectively address the Commission’s concerns.

In case of an infringement, the EC can impose fines up to 10 per cent of the company’s total worldwide turnover. Such fines can go up to 20 per cent in case of repeated infringement.

In case of systematic infringements, the EC may also adopt additional remedies such as obliging a gatekeeper to sell a business or parts of it, or banning the gatekeeper from acquisitions of additional services related to the systemic non-compliance, the Commission said.

(Photo: André Rainaud/ freeimages.com)